Final report of Convergence Review released

30 April 2012:  The final report of the independent Convergence Review (‘The Review’)[1] commissioned by the Federal Government was released on Monday 30 April 2012.  The Convergence Review was tasked with examining examine the policy and regulatory frameworks that apply to the converged media and communications landscape in Australia.

The Review has recommended a substantial overhaul of media and communications laws and regulations in Australia, with a focus on removing unnecessary regulation and establishing a unified regulatory scheme rather than schemes specific to radio, television, print and online.  The key recommendations of the Review are outlined below.

I           Defining ‘Content Service Enterprises’

The Review recommends that significant media enterprises be defined as ‘content service enterprises’ and be subject to regulation.  Organisations would be defined as content service enterprises if they:

  • have control over the professional content they deliver;
  • have a large number of Australian users of that content; and
  • have a high level of revenue derived from supplying that professional content to Australians.

The threshold for users and revenue would be set at a high level to exclude small and emerging content providers. This proposed framework is only concerned with ‘professional’ content.[2]

II         Media Ownership

The Review has argued for a continued need to prevent undue concentration of media ownership.  The mechanism suggested is a continuance of a ‘minimum number of owners’ rule.  However, this scheme would be unified for all media types and administered by a single watchdog that would replace the ACMA (see ‘Regulatory Bodies’ below).  The tests for the minimum number of owners will be informed by the existing ‘4/5 rule’ which requires at least five separate media groups in a metropolitan radio licence area, and four in regional areas.  In addition, a ‘public interest’ test would apply to any changes in control, considering whether such changes would reduce either the number of owners or the range of content in Australia.[3]

III        Content Standards

The Review has advocated a ‘flexible’ and technology neutral approach to content standards.  In particular the Review accepted the recommendations of the ALRC’s National Classification Scheme Review[4] (‘Classification Review’) that content be classified once across all platforms.  However, in regards to journalistic standards the Review has specifically advocated an industry-based and not statutory-based model, at odds with the recommendations of the Finkelstein Independent Media Inquiry concluded in February.[5]

The Review has also recommended that the government continue to subsidise the production of Australian produced drama, children’s programming and documentaries.  It has recommended a ‘uniform content scheme’ to ensure a good proportion of Australia produced content across all media.  Under the scheme, all producers classified as ‘content service enterprises’ would be required to contribute to the production of Australian content.[6]

IV        New Regulatory Bodies

As stated above, the Review recommends that defined ‘content service providers’ be subject to significant regulation.  The Review has recommended a move away from industry specific regulation to ‘principle based’ legislation and regulation.  It has advocated the replacement of the functions of the ACMA with two regulatory bodies, one statutory based and the other a new industry body.

A         New Statutory Regulator

The proposed new statutory regulator would replace the ACMA and operate at ‘arms length’ from government.  The regulator would incorporate a new Classification Board, as recommended by the Classification Review, to remove the duplication of classification functions that currently exists for different mediums.  The body would be responsible for defining the thresholds for content service enterprise.  It would administer the ‘minimum number of owners’ rule and the public interest test, and ensure that Australian and local content obligations are applied.  This body would also be concerned with regulation and rulings on content-related competition issues, but would ‘complement’ and not ‘duplicate’ existing ACCC powers in this area.

B         New Industry Body

The Review has recommended the establishment of an industry body to oversee standards for news and journalism.  Again, a platform neutral approach is preferred.  This body would absorb the current functions of the ACMA and the Australia Press Council in regulating news and commentary.  The Review has recommended that content service enterprises be required to be members of an industry-led body established to develop and enforce a media code aimed at:

  • promoting news standards;
  • adjudicating on complaints; and
  • providing timely remedies.[7]

V         Other Recommendations

The Review has recommended that current broadcast licence fee arrangements be replaced with allocation of ‘spectrum licenses’.  Companies holding such licenses would be free to lease or sell this spectrum, meaning that there would be no requirement that companies be both platform operators and content suppliers.

The Review has also conducted a statutory review of Schedule 7 of the Broadcasting Services Act 1992 (Cth).  This schedule established a scheme to allow the ACMA to issue take-down notices or require internet service providers to prevent access to online content deemed to be rated at or above MA15+.  The Review has recommended that the scheme be dismantled and folded into the new classification system proposed by the ALRC.

VI        Criticism

The ‘public interest’ test has already attracted early criticism from media owners, with industry leaders including News Limited, Foxtel and Network Ten questioning the subjectivity of the test and expressing fears that it will increase the regulatory burden on the industry.[8]

There has also been significant protest at the manner in which ‘content service enterprises’ are defined and the amount of regulation they would be subject to.  In particular, concerns have been expressed that ‘[c]ompanies such as Google, Telstra, Apple and Facebook would escape the regulatory net as would social media and user-generated content’, whilst Fairfax Media, News Limited and the TV networks would be compelled to join the new industry watchdog and subject to increased regulation.[9] 

In relation to the new local content quotas, Free TV Australia Executive Julie Flynn has expressed concern that ‘Costs for content are going up and revenue is going down. It is a recipe for disaster’.[10]

[1] Australian Government, ‘Convergence Review: Final Report’, (Report: Australian Government, March 2012) <>  (‘Report’).

[2] See Report Ch 1.

[3] See Report Ch 2.

[4] ALRC, ‘National Classification Scheme Review, (Report: ALRC, 1 March 2012) <>.

[5] See R Finkelstein, ‘Report of the Independent Inquiry into the Media and Media Regulation’, (Report: 28 February 2012) <>.

[6] For details see Report Ch’s 4-5.

[7] For details see Report Ch 4.

[8] See Kirsty Simpson, ‘Overhaul media laws: review’, The Age, 1 May 2012, <>.

[9] Julian Lee, Bianca Hall and Kirsty Simpson, ‘Plan for new media watchdog, more local content’, The Age, 1 May 2012, <>.

[10] Ibid.

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